Jade Group, Inc. · TSE:3558
Jade — Q1 FY2024 Earnings Presentation
37 slides from Jade's earnings presentation, Jul 14, 2023
Slide 1: JADE GROUP, Inc. FY2024 1Q IR Presentation
JADE GROUP, Inc. FY2024 1Q IR PRESENTATION 2023.7.14
Slide 2: Table of Contents
目 次 1. Summary and JADE GROUP’s strategic position 4. Result 2. Our Business ① P&L ① Vision, Mission and Policy (1) GMV ② Seven initiatives for SDGs (2) Sales ③ Initiatives for D&I ④ Business model (3) SG&A (1) “ecosystem” that consists of the 3 businesses (4) Operating profit (2) Sales accumulation
Slide 3: 1. Summary
1. SUMMARY • GMV(before intercompany eliminations) grew to JPY 7.4bn (growth: +33.6%, vs annual plan: 22.9% – 24.8%), and Operating profit grew to JPY 0.5bn (growth: +53.7%, vs annual plan: 30.8%), both record highs on a quarterly basis. • Although the withdrawal of the official adidas store and oth
Slide 4: JADE GROUP's Strategic Position
JADE GROUP’s Strategic Position As with Farfetch, development of synergies among the three businesses is the strategic position of the Jade Group. Specialized in Fashion EC EC x PF x Brand Synergy ZALANDO Farfetch • Started as a shoe EC has now • Luxury-specialized EC grown into a comprehensive fash
Slide 5: Our Business
Our Business 5
Slide 6: Vision, Mission and Policy
2. Our Business ①Vision, Mission and Policy VISION BE THE ONLY Breaking stereotypes and bring “ONLY LOCONDO CAN DO” MISSION Bring “Revolution” to the industry, and “flexibility” to clients Resolve the voices in shoes/fashion industry, and bring flexible/happy experience to clients. POLICY Fast, Fait
Slide 7: Seven initiatives for SDGs (1/2)
2. Our Business ②Seven initiatives for SDGs (1/2) ① Think of energy ⚫ Using LED at warehouse ⚫ Implemented “BIGASSFANS” at all floors ⚫ Control air conditioner at 28℃, and heater at 20℃ ② Think of recycle ⚫ Using recycled plastics for palette at the warehouse ⚫ Providing eco-leather (made by scrap l
Slide 8: Seven initiatives for SDGs (2/2)
2. Our Business ② Seven initiatives for SDGs (2/2) ⑤ Gives back ⚫ Providing open space for Yachiyo citizens ⚫ Build new bus lane together with Yachiyo city and bus company. Providing a rest area for the drivers ⑥ Equality and diversification ⚫ Fair evaluation system with 50 competencies ⚫ Diversific
Slide 9: D&I Initiatives
2. Business Overview ③ "D&I” Initiatives Although our D&I (Diversity & Inclusion) indexes are currently above average, we will continue to improve our environment to achieve further improvements. Item Current Industry average Target (3 years) Main actions Wage differentials between men and 63.6% - -
Slide 10: Ecosystem that consists of the 3 businesses
2. Our Business ④Business model (1) “ecosystem” that consists of the 3 businesses JADE GROUP has 3 businesses connected complementary and the ecosystem creates our own competitiveness. Sharing inventories: Sell offline inventories at EC Growth driven by the structure Sharing infrastructure: Share lo
Slide 11: EC MALL Business
EC PF 2. Our Business ④Business model (1) EC MALL Business Brand LOCONDO has own EC mall （LOCONDO, FASHION WALKER, SWS and waja）and stores in other companies’ EC mall such as Rakuten and Yahoo! Promote business expansion by “increase in number of members” through effective web advertising operations
Slide 12: PLATFORM business
EC PF 2. Our Business ④Business model (2) PLATFORM business Brand Providing various systems and services that enable centralization of inventories and integration of digital information through DX（Digital Transformation） Promoting "ALL-IN-ONE Package" implementing all the services below and bring pe
Slide 13: BRAND business
EC PF 2. Our Business ④Business model (3) BRAND business Brand There are two major brand businesses, the “brand management business", which is mainly developed as an exclusive agency or as the licencee for overseas brands, and the "D2C (Direct To Consumer) brand development business," which is devel
Slide 14: Sales accumulation model
2. Our Business ④Business model (2) sales accumulation model A model that builds up sales through the cycle below. New buyers → repeat customers → expansion of active user base → enhancement of product lineup → increase in new visitors More visitors from search engine(SEO) Approx. 34% *1 of new cust
Slide 15: Break-even point Model
2. Our Business ④Business model (3)profit structure – Break-even point Model- A business model in which the operating profit on sales improves once sales exceeds the break- even point. (1) GMV, (2) Marginal profit ratio (= gross margin ratio – variable cost ratio) and (3) Fixed costs are Key Perform
Slide 16: MTB and LTV
MTB and LTV 16
Slide 17: Overview of the Mid-term business plan
3. MTB and LTV ①Overview of the Mid-term business plan (MTB) • We took over Reebok Japan business as one of the core brand to JADE GROUP business. We started to manage the Reebok operation from Oct 1st 2022 under the newly established joint-venture company between JADE GROUP (66%) and ITOCHU Corpora
Slide 18: EC ratio in the fashion market
3. MTB and LTV ②EC ratio in the fashion market The current EC ratio in the domestic fashion market is about 21%. It is expected to increase to approx. 35% in 2030, where the EC market size will be approx. 3.5 trillion JPY. Fashion Market Fashion EC Market and EC ratio （100MM） （100MM） 160,000 40,000
Slide 19: GMV
3. MTB and LTV ③GMV ✓ Get 3% of the market share in the 3.5 trillion JPY market; 100 billion JPY (USD approx. 1bn) ✓ We will increase our GMV to JPY 40 Bn in three years through (a) organic growth by aggressive investment, (b) Reebok business, and (c) additional M&A (EC or D2C brands) GMV : JPY 100
Slide 20: GMV by business (JPY 100MM)
3. MTB and LTV ③GMV (unit; JPY 100MM) 【EC】EC (except D2C) 【PF】PF (except MANGO) 350 ① FY 2022 reflected the actual result (before intercompany elimination) 【Brand】RBKJ、MANGO、D2C ② We set gross GMV (before intercompany elimination) as KPI since we could verify that we can maintain 150 16% of marginal
Slide 21: GMV growth drivers by business
3. MTB and LTV ③GMV (unit: JPY 100MM) FY22 (actual) FY 30 (estimate) CAGR Key growth drivers • Realizing the organic growth through leveraging our platform service - inventory sharing -, and EC 170 500 + 14％ strengthening the product line, promotion, and UI/UX. • In addition, M&A of brands can drive
Slide 22: Forecast for fixed cost
3. MTB and LTV ④fixed cost The new warehouse will be fully operational from June 2022, and no further expansion is expected for at least five years thereafter. Other costs are planned to increase gradually along with GMV Plan 6Bn 60 Includes; ※breakdown: image [Rent] LOCOPORT III Start renting all f
Slide 23: Operating profit and Aggressive investment
3. MTB and LTV ⑤operating profit and Aggressive investment We will invest into aggressive promotion controlling minimum ROE level at 10% (ROE in FY22 : 23.7%) when demand & supply situation is good. When we think the situation is not good or we need more cash for additional M&A, we will maximize our
Slide 24: Results
RESULTS 24
Slide 25: Result P&L
4. Result ①P&L (unit; JPY 100MM) GMV increased +33.6% YoY due to the launch of the Reebok business and the resulting increase in Reebok's e-commerce mall sales and PF sales (BOEM). Operating income increased 53.6% YoY to 538 million yen due to the start of the Reebok business and cost controls, both
Slide 26: P&L (1) GMV
4. Result ①P&L (1) GMV（unit; JPY 100） We maintained the GMV at our own E-malls through the steady growth at LOCONDO.jp, M&A of SWS and waja although D2C decreased significantly because of the demand cycle. At the same time, Platform business increased significantly mainly due to Reebok business, BOE
Slide 27: P&L (2) Sales
4. Result ①P&L (2)Sales（unit; JPY MM) Revenue increased by 48.9% mainly supported by Reebok business. +48% 3,423 2,856 2,762 2,589 3,202 2,218 2,700 2,376 2,598 1,980 2,190 2,201 2,310 2,813 1,883 1,966 1,955 1,476 2,150 1,371 2,300 (Note) In the case of purchased inventory, the selling price is rec
Slide 28: P&L (3) SG&A
4. Result ①P&L (3)SG&A (unit; JPY MM) Although the rent for the new warehouse increased, and fees at RBKJ increased, we could manage the SG&A through controlling costs such as optimization of ads and logistics as well as reduction of fees. Item FY22 1Q % FY23 1Q % YoY Main factors of variation Labor
Slide 29: P&L (4) Operating Profit
4. Result ①P&L (4)Operating Profit (unit; JPY MM) Operating income was 538 million yen, the highest quarterly figure ever recorded. 538 504 485 378 350 319 303 303 173 145 100 105 99 87 57 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2023 1Q 2Q
Slide 30: YoY comparative analysis of operating profit
4. Result ①P&L (4) YoY comparative analysis of operating profit (Unit: JPY MM) Operating income increased 53.7% to 538 million yen due to increased transaction volume, higher gross profit margin, and variable cost control. △ 164 ＋225 △ 49 △ 19 △8 △4 ＋209 538 350 FY22 1Q GMV Gross Profit ratio Rent L
Slide 31: Result B/S
4. Result ②B/S (unit; JPY MM) Debt-free management, financial soundness with equity ratio at 59%. Current Assets 8,002 Current Liabilities 3,489 Deposits received Cash and cash equivalents 3,486 1,018 for consignment sales Inventories 2,506 short-term loans payable 102 Fixed Assets 2,117 Fixed Liabi
Slide 32: EC mall: number of active users
4. Result ③Each business (1) EC mall : number of active users (unit; K) Number of active users of own e-mall increased compared to the previous quarter Other E-malls 322 348 359 346 349 356 339 313 287 296 287 283 300 306 297 291 265 249 231 220 213 833 792 788 809 829 812 796 783 796 783 Our own E-
Slide 33: EC mall: Average shipping price
4. Result ③Each business (1) EC mall : Average shipping price (Shipping basis) Our own E-malls stayed at same level 2% and other E-malls increased by+ 13% The price basically stays in a reasonable range. 12,638 11,731 11,914 11,720 11,406 10,776 10,85310,074 10,614 10,907 10,870 10,935 10,736 10,095
Slide 34: EC mall: Return rate
4. Result ③Each business (1) EC mall : Return rate Return rate of our own E-malls have been steady at around 20%. 30% 29% 29% 27% 27% 27% 26% 26% 26% 25% 25% 25% 22% 22% 22% 22% 21% 21% Our own E-malls 20% 20% 20% 20% 19% 18% 18% Excluding D2C 8% 7% 8% 8% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 7% 6% 6% 6% 5%
Slide 35: EC mall: Number of brands
4. Result ③Each business (1) EC mall : Number of brands The number of brands excluding waja is 3,428. The number of brands including waja is 4,590 4,849 4,661 4,605 4,590 4,644 4,182 3,969 3,838 3,676 3,632 3,426 3,344 3,361 3,428 2,972 3,506 2,648 2,458 2,473 2,546 2,327 2,365 2,097 2,126 2,167 2,1
Slide 36: Platform: e-3PL shipment quantity
4. Result ③Each business (2) Platform : e-3PL shipment quantity (10K units) e-3PL shipments increased steadily by +24%. Our goal is to become “Hub of warehouse” in the shoe industry. 113 + 24% 91 92 85 81 81 71 63 63 66 61 56 59 52 46 44 45 39 37 36 13 2018 2Q 3Q 4Q 2019 2Q 3Q 4Q 2020 2Q 3Q 4Q 2021
Slide 37: Disclaimer
Disclaimer • This document contains forward-looking statements that are based on current plans, estimates, forecasts or projections by JADE GROUP Inc. as well as JADE GROUP Inc.’s business and industry trends. • These forward-looking statements are subject to various risks and uncertainties. • Known